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An Activist, an Ethicist, and an Economist Walked Into a Bar....or, Making Visible the Hands in the Market

Tuesday, Dec. 13, 2011
kw head 600 is the fruit of a philosopher who asked a practical question: what could I do to help very poor people improve their lives? Matt Flannery visited Africa and discovered that a very small amount of money could help people in big ways, and that people in existing communities of trust would ensure that a loan was repaid. With some friends and family members, Matt started making a few loans. is now one of the most visible micro-lending institutions in America. Matt visited Santa Clara on November 9, and told stories of how this came about.

Every time I hear news about the big banks, the ones too big to fail, I get a bit more cynical. The enormous salaries to men whose banks’ bad behavior brought the American economy to its knees, credit default swaps so complex their inventors could not understand them, secret loans made by the feds to banks, government bailouts used to fund lobbyists to fend of regulation...these stories prompt in me a question: is the whole banking industry a parasite on society? The occupy movement does have a point here.

Starting a bank was the farthest thing from Matt Flannery’s mind, but he found, as I have, that one cannot foster human flourishing for poor people without providing them access to some capital. Matt was a computer programmer at TiVo with a Masters degree in philosophy, so he came to banking through a nonconventional path. He didn’t get into this line of work to make money, but rather, to alleviate poverty. Perhaps it was the ethicist in him that perceived economic options where others saw nothing but risky loans. In the Ugandans he met he found people alive with hopes and dreams, and he activated his networks back in America to partner with them. To accommodate the compassion of micro-loaners like you and me, he created a website to share the stories of people who needed credit, and was born.

This form of economics has nothing to do with the predatory or parasitic practices that foster cynicism. Instead, it’s based on mutuality through the international sharing of stories. Micro-loaners here in America learn about the needs of the poor, working so hard -- but unable to escape the traps of poverty without credit--in poorer countries over there. By exchanging stories, fosters practical compassion. People do want to make a difference, and by making a micro-loan, they can. facilitates this exchange.

Matt clearly loves what he does, and he has apparently found his life’s work. He used his computer programming skills to help countless people. From another perspective, his is a very old solution. In response to interest rates of >40% during the late Middle Ages, members of my religious order, the Franciscans, devised and launched local credit unions to provide loans at a fraction of this rate. These were the forerunners of the modern banking system....and this from a religious order that takes its vow of poverty quite seriously!

Fostering practical justice means understanding the economic reality of people who are poor, and just might be able to make it out of their poverty trap with a loan. Cynicism of American banking may be warranted, and the occupy movement may decry greed, but understanding how well conceived economic interventions based on solidarity can make a huge difference in the lives of others seems highly appropriate for a Catholic university that prides itself on teaching conscience. It is my hope that the Global Social Benefit Fellowship can help some Santa Clara students learn this.

Keith Douglass Warner OFM is a Franciscan Friar and the CSTS director of education.

Watch the Video of Matt's Kiva talk from November 9th, here.

Tags: education, event, Impact Capital, social entrepreneurs


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